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SAP: Establishing a Research Centre in China  
Product Ref: 09/408C Company: SAP

Product Type: Case Industry: Application Software

Related Product(s): Teaching Note
Leading technology companies from around the world are entering China to establish research centres, leverage China's unique situation of rapid growth and large manufacturing base, and scooping up talent from China's leading universities. SAP, the world's largest application software company, recently entered China to establish one of its exclusive technology research centres, SAP Research. While this division has been successful at its headquarters in Germany, the Chinese labour market and business environment remain difficult for foreign multinationals to navigate. Foreign companies often experience challenges ranging from difficulty finding innovators in a competitive talent pool to dealing with turnover of employees that have an aggressive focus on compensation. There is concern that locating in Shanghai, far away from the innovative hotbed of universities and other technology research centres that have set up shop in Beijing, was the wrong choice for SAP in China. What would be necessary to win the war for high-profile PhDs in the competitive Chinese labour market? What would be required for SAP Research China to be an integral contributor in SAP's worldwide innovation network?

This case illustrates the opportunities and challenges of research and development ("R&D") globalisation and familiarises students with the unique challenges of R&D strategy, new-market entry strategies, human resource management, innovation, clustering and intellectual property protection in rapidly developing countries. In particular, this case is relevant to studies in R&D globalisation, business in China and talent management.
Functional Area : Knowledge and Human Resource Management
Production & Operations Management
R&D Globalization Strategy and General Management

Issues: SAP, China, Research Centre, New-Market Entry Strategies, Emerging Markets, Talent Management, Innovation, Intellectual Property Protection, Compensation
Length: Text: 16 pages
Exhibits: 11 pages
Country: China (People's Rep. of)

Pub. Year: 2009 Level of Difficulty: 2
This product type is available in the following language(s):      English
Related Information: N/A
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